Sino-in­dian Co­op­er­a­tion as a Global Sta­bi­lizer

The rapid eco­nomic growth of China and In­dia de­pends on a ra­tio­nal global trade or­der, and the two coun­tries should co­op­er­ate more deeply in the main­te­nance and for­mu­la­tion of global trade rules.

China Pictorial (English) - - Contents - Text by Zhang Shu­jian

The Boao Fo­rum for Asia (BFA) An­nual Con­fer­ence 2018 was held from April 8 to 11, wherein the eco­nomic prospects of In­dia as well as co­op­er­a­tion and ex­change be­tween China and In­dia were im­por­tant top­ics of dis­cus­sion. Bi­lat­eral Eco­nomic and Trade Co­op­er­a­tion on the Rise

In March, an in­ter­na­tional trade pro­mo­tion group of the Min­istry of Com­merce of China, in­clud­ing more than 30 rep­re­sen­ta­tives from Chi­nese en­ter­prises cov­er­ing in­dus­tries such as tex­tiles, phar­ma­ceu­ti­cals, agriculture, petro­chem­i­cals, trade and com­merce, vis­ited In­dia. The two sides signed 101 trade deals worth US 2.37 bil­lion in New Delhi, an amount equal to 14.5 per­cent of China’s to­tal im­ports from In­dia in 2017. At the same time, the 11th meet­ing of Chi­naIn­dia Joint Group on Eco­nomic Re­la­tions, Trade, Science and Tech­nol­ogy was also held in New Delhi. Chi­nese Com­merce Min­is­ter Zhong Shan and In­dian Com­merce and In­dus­try Min­is­ter Suresh Prabhu both ex­pressed will­ing­ness to deepen prac­ti­cal co­op­er­a­tion, which is tremen­dously sig­nif­i­cant con­sid­er­ing the global shadow of de­pres­sion.

In re­cent years, re­la­tions be­tween China and In­dia have ex­pe­ri­enced ups and downs. The Dong Lang (Dok­lam) stand­off last year brought re­la­tions be­tween the two coun­tries to the low­est level in nearly 20 years. De­spite In­dia launch­ing anti-dump­ing in­ves­ti­ga­tions on China and a move­ment to “boy­cott Chi­nese prod­ucts,” bi­lat­eral trade be­tween China and In­dia reached a new high of 84.4 bil­lion U.S. dol­lars in 2017, ris­ing by 20.3 per­cent from the pre­vi­ous year. While China con­tin­ues to be In­dia’s largest trade part­ner, its im­ports from In­dia have in­creased by nearly 40 per­cent, which to some ex­tent al­le­vi­ated the trade im­bal­ance be­tween the two coun­tries. In­vest­ment co­op­er­a­tion be­tween China and In­dia has been in­creas­ing. Chi­nese en­ter­prises have in­vested more than US 8 bil­lion in In­dia, and In­dian in­vest­ment in China grew by 18.5 per­cent an­nu­ally over the past three years.

Mu­tual Ben­e­fits and Com­mon Growth

Closer ties in bi­lat­eral trade and in­vest­ment are not only re­flected in macro sta­tis­tics, but also in the longterm eco­nomic de­vel­op­ment plans of In­dia and the daily lives of hun­dreds of mil­lions of In­di­ans. Since Naren­dra Modi be­came In­dia’s prime min­is­ter in 2014, the In­dian govern­ment has launched a num­ber of ma­jor ini­tia­tives, such as “Make in In­dia,” “Dig­i­tal In­dia,” “Skill In­dia” and “Start-up In­dia.” At the same time, In­dia has con­tin­u­ously re­duced for­eign in­vest­ment thresh­olds, im­proved the busi­ness en­vi­ron­ment, ab­sorbed more cap­i­tal to pro­mote in­dus­trial up­grad­ing, and cre­ated more jobs. Chi­nese en­ter­prises grasp the op­por­tu­ni­ties in the In­dian mar­ket and con­tinue to ex­pand in­vest­ment in tra­di­tional man­u­fac­tur­ing sec­tors such as au­to­mo­bile, ma­chin­ery, and elec­tri­cal equip­ment and hi-tech fields such as the in­ter­net. In re­cent years, Alibaba, Ten­cent and other Chi­nese in­ter­net gi­ants have con­stantly ex­plored the In­dian mar­ket, and pro­vided China’s de­vel­op­ment ex­pe­ri­ence and huge cap­i­tal in­put for lo­cal In­dian star­tups, pro­mot­ing “Start-up In­dia” as they ex­panded their shares of the In­dian mar­ket and stim­u­lat­ing In­dia’s en­tre­pre­neur­ial en­thu­si­asm and in­no­va­tive po­ten­tial. In­dia’s largest on­line pay­ment plat­form Paytm that be­came pop­u­lar af­ter Modi’s de­mon­e­ti­za­tion cam­paign, as well as e-com­merce plat­form Flip­kart, UC Browser and other fa­mous In­dian in­ter­net brands, are backed by Chi­nese in­ter­net com­pa­nies. Many start-up projects have been launched thanks to the sup­port of Chi­nese cap­i­tal. This as­sis­tance has in­creased the po­ten­tial for e-com­merce in In­dia while im­prov­ing the lives of hun­dreds of mil­lions of In­dian in­ter­net users.

As for hard­ware, Chi­nese mo­bile

phone man­u­fac­tur­ers, rep­re­sented by Xiaomi, have in­vested in fac­to­ries in In­dia to par­tic­i­pate in “Make in In­dia,” cre­at­ing jobs for lo­cal peo­ple while pro­duc­ing high-qual­ity prod­ucts. In 2017, Chi­nese brands ac­counted for half of the In­dian smart­phone mar­ket and four of the top five brands in terms of ship­ments. Ad­ver­tise­ments for Chi­nese mo­bile phone brands can be seen all over the streets of In­dia. Vivo and Oppo are the ti­tle spon­sors of the In­dian Pre­miere League (IPL) and In­dia’s na­tional cricket team, re­spec­tively.

Un­der ad­verse fac­tors of bi­lat­eral po­lit­i­cal re­la­tions, the ris­ing Si­noIn­dian eco­nomic and trade ex­change is show­ing the world that the in­ter­de­pen­dency in eco­nomic growth and so­cial de­vel­op­ment be­tween the two coun­tries is un­stop­pable. The vast mar­ket cre­ated by the huge pop­u­la­tion of In­dia and the coun­try’s strong eco­nomic growth po­ten­tial have made In­dia one of the best in­vest­ment des­ti­na­tions for Chi­nese en­ter­prises, and at the same time the two coun­tries’ vast ter­ri­to­ries, large pop­u­la­tions and sim­i­lar de­vel­op­ment back­grounds give them many com­mon grounds in ex­plor­ing the paths for de­vel­op­ment and so­cial gov­er­nance. As the two largest de­vel­op­ing coun­tries in the world, achiev­ing eco­nomic growth is a com­mon goal of China and In­dia as they strive to im­prove the liv­ing stan­dards of the peo­ple and elim­i­nate poverty. In his re­port to the 19th Na­tional Congress of the Com­mu­nist Party of China (CPC), Chi­nese Pres­i­dent Xi Jin­ping, also gen­eral sec­re­tary of the CPC Cen­tral Com­mit­tee, pro­posed build­ing China into a great mod­ern so­cial­ist coun­try that is pros­per­ous, strong, demo­cratic, cul­tur­ally advanced, har­mo­nious and beau­ti­ful by the mid­dle of the cen­tury. The Modi ad­min­is­tra­tion also pro­posed build­ing a “great In­dia” by 2047. Both sides have pledged to ra­tio­nally con­trol dif­fer­ences dur­ing their com­mon rise and to dock the Chi­nese Dream with the In­dian dream through sus­tain­able de­vel­op­ment and mu­tual ben­e­fits.

Hand in Hand to Face Trade Pro­tec­tion­ism

The roles of China and In­dia in main­tain­ing the world trade or­der and pro­mot­ing glob­al­iza­tion have be­come in­creas­ingly prom­i­nent in the con­text of the greater pro­tec­tion­ism chal­lenges emerg­ing in the world trade or­der and the process of glob­al­iza­tion.

As ben­e­fi­cia­ries of eco­nomic glob­al­iza­tion, the rapid eco­nomic growth of China and In­dia re­lies on a ra­tio­nal global trade or­der. How­ever, China and In­dia face many chal­lenges eco­nom­i­cally due to the grad­ual in­tro­duc­tion of U.S. Pres­i­dent Don­ald Trump’s pro­tec­tion­ist trade pol­icy. In­dia and China are listed among the ten coun­tries with which the United States has the high­est trade deficits. Trump has re­peat­edly threat­ened to over­haul H-1B visas since he ran for pres­i­dent, caus­ing se­ri­ous con­cern in In­dia’s IT out­sourc­ing in­dus­try. The mea­sure will af­fect tens of thou­sands of In­dian IT em­ploy­ees who work in the United States and make a huge im­pact on In­dian IT ser­vice ex­port. The high tar­iffs im­posed by the United States on the im­port of iron and steel prod­ucts are es­ti­mated to dis­rupt global steel prices and af­fect re­lated In­dian in­dus­tries. Amer­i­can trade pro­tec­tion­ism is bound to im­pact In­dia’s eco­nomic growth and in­dus­trial de­vel­op­ment as the coun­try ur­gently needs to boost the scale and lev­els of its man­u­fac­tur­ing in­dus­try, re­lieve unemployment pres­sures and tap into the po­ten­tial of its de­mo­graphic div­i­dend.

As victims of Amer­ica’s trade pol­icy, China and In­dia can counter not only by ex­pand­ing bi­lat­eral trade through deep­en­ing eco­nomic ex­change, but also by car­ry­ing out broader co­op­er­a­tion in the main­te­nance and for­mu­la­tion of global trade rules. In his speech at the World Eco­nomic Fo­rum (WEF) in Davos in 2017, Pres­i­dent Xi Jin­ping called for “de­vel­op­ing global free trade and in­vest­ment, pro­mot­ing trade and in­vest­ment lib­er­al­iza­tion and fa­cil­i­ta­tion through open­ing up and say­ing no to pro­tec­tion­ism.” At the clos­ing cer­e­mony of the WEF an­nual meet­ing in Davos in Jan­uary this year, Prime Min­is­ter Modi also ex­pressed In­dia’s sup­port for global free trade and listed trade pro­tec­tion­ism, cli­mate change and ter­ror­ism as the three ma­jor chal­lenges that the world faces to­day. As the two fastest-grow­ing ma­jor economies in the world, China and In­dia should play a lead­ing role in main­tain­ing the world trade or­der and pro­mot­ing glob­al­iza­tion, in­ject great en­ergy into their own eco­nomic de­vel­op­ment, and foster sta­ble and peace­ful global gov­er­nance. The au­thor is an as­sis­tant re­searcher at the In­sti­tute of South and South­east Asian and Ocea­nian Stud­ies un­der the China In­sti­tutes of Con­tem­po­rary In­ter­na­tional Re­la­tions.

June 20, 2017: Kavin Bharti Mit­tal, CEO of Hike Mes­sen­ger, speaks dur­ing a news con­fer­ence in New Delhi, In­dia. The startup was val­ued at US$1.4 bil­lion last year af­ter se­cur­ing US$175 mil­lion from in­vestors in­clud­ing Ten­cent Hold­ings Ltd. and Fox­conn Tech­nol­ogy Group. VCG

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